Trump’s trade policies slammed by GOP lawmakers

President Donald Trump’s “America First” trade policies took a bashing Wednesday from free-trade House Republicans, angry and fearful about the prospect of global retaliation and how the policies are playing back home.

From the uncertainty caused by NAFTA renegotiations, to his imposition of tariffs on steel and aluminum, to his expected announcement this week of duties on tens of billions of dollars of Chinese goods, many lawmakers said that farmers and manufacturers in their districts are worried about lost sales and being hit with retaliation.

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Some of those actions could also hurt consumers, they said,especially if Trump goes after Chinese-made electronics and other household goods in a bid to level the trade playing field.

“I think we're on pins and needles,” Rep. Erik Philip Paulsen (R-Minn.) told U.S. Trade Representative Robert Lighthizer at a House Ways and Means Committee hearing on Trump’s trade agenda. “I hope we won’t be seeing tariffs imposed on products that a lot of American families and consumers and small business purchase every day.”

To drive home his concerns, Paulsen cited a study by the Trade Partnership, a Washington-based analytical firm, that estimates Trump’s steel and aluminum tariff will cost five jobs in downstream manufacturing and services sectors for every one job it creates in steel and aluminum.

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If expected trade retaliation is added in, the ratio widens to 18 lost jobs to every one job created, affecting many blue-collar workers who voted for Trump, Paulsen said.

Lighthizer brushed aside the economic analysis, saying he doubted its accuracy and assuring the congressman Trump had no desire to launch a trade war.

“But on the other hand, you have to ask yourself, can we go on with an $800 — and growing — billion trade deficit,” Lighthizer said. “So, we have to do something and the people who are benefiting from the status quo are always going to be against it. We understand that, and we have to balance their interest.”

The Trump administration is already taking some steps to limit the impact of the new steel and aluminum tariffs by entering into talks to exempt some countries, and starting a process for importers to ask for specific products to be excluded.

But it's still uncertain how much difference that will make and whether it will dissuade the European Union from following through with plans to retaliate on billions of dollars of U.S. exports.

Rep. Jackie Walorski (R-Ind.) told Lighthizer she was concerned not only about the impact of the steel and aluminum tariffs, but also how China might retaliate against farmers and businesses in her district if Trump imposes tariffs to punish Beijing over its poor protection of U.S intellectual property rights.

“In my district in northern Indiana, with the second largest concentration of manufacturing jobs in the country, there’s a whole host of ag that I’m concerned about — corn, soybeans, dairy, pork, beef, poultry, tomatoes and the list goes on,” Walorkski said. “Half the soybeans grown in Indiana are exported to China. Honeywell makes brakes and avionics in South Bend that go into Boeing airplanes. China is threatening retaliation against both.”

Again, Lighthizer said the administration was sensitive to those concerns, but “we can’t be in a position where we take no action because of threats of retaliation. That’s how you end up having an $800 billion trade deficit, which costs literally millions and millions of jobs in America.”

Lighthizer acknowledged that it’s unfortunate that agriculture always “is on the front line of retaliation.”

“It’s an unfair situation, but one that we have to come to grips with,” he said. “You have to think about [the U.S. imposing] counter-retaliation. You have to think about programs for farmers who are in this situation. There are a lot of things that are outside of my realm that have to be considered.”

Lighthizer faced some of the toughest Republican criticism when it came to questions about the NAFTA negotiations, where the Trump administration has made several controversial proposals.

Those include eliminating a special dispute settlement mechanism for investors and inserting a new “sunset review” mechanism that would terminate the pact after five years unless the three countries agree to renew it.

Republicans started the hearing by releasing a letter signed by 103 party members in the House and Senate, warning Lighthizer he would have a difficult time winning approval of the revamped NAFTA deal if it drops the investor-state dispute settlement mechanism, also known as ISDS.

Several Republicans drove home that point, including Committee Chairman Kevin Brady (R-Texas) and Rep. David Schweikert (R-Ariz.), both of whom rejected Lighthizer’s argument that the provision undermines U.S. sovereignty.

Rep. Kristi Noem (R-S.D.) told the story of a farmer in her district who asked if she knew what the Trump administration was thinking on trade “'because it seems like every time they take a position, soybeans drop 40 cents a bushel and we can’t hardly pay our bills today.'”

“These farmers are very worried that the administration, who they supported, is going to lose them a trade deal over provisions that are widely unpopular,” Noem added, focusing in particular on the business uncertainty caused by the sunset provision.

She pressed Lighthizer to say whether he would accept a final deal without the sunset clause, but the trade chief told Noem he wasn’t going to negotiate in public.

Not every Republican clashed with Lighthizer.

A few such as Reps. Tom Rice of South Carolina and Jason Smith of Missouri said they welcomed Trump's tougher approach. Smith credited Trump's new aluminum tariff with the reopening of a smelter in his district that had closed several years ago.

"These are real changes and real aspects that are affecting real people who have not always been on the right side of victories," Smith said.

But Rep. Darin LaHood (R-Ill.), who represents one of the largest agricultural producing districts in the United States, got under Lighthizer's skin when he asked the trade representative if he knew of any business group that supported the administration's proposal for rewriting NAFTA's auto trade rules.

"Listen, there are business groups all over the place. I have no idea where they are on rules of origin," Lighthizer said. He then refused LaHood's request to provide the information later.

LaHood also asked Lighthizer if he agreed with one of Trump's tweets calling NAFTA "a bad joke." The veteran attorney declined to answer by saying he hadn't seen the quote.

"Well, I would just say that causes a lot of concern," LaHood said. "The farmers in my district and rural America support the president ... But I can't emphasize enough the concern with farmers in rural America when it comes to NAFTA."